SCIO briefing on China's commerce work, operations in H1 2021
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E-mail China.org.cn, July 29, 2021
International Business Daily:
Recently, prices for international bulk commodities and raw materials have soared, and the RMB has appreciated. How much impact will these have on the business of foreign trade companies? What measures will be taken to ease the strain on business costs? Thank you.
Li Xingqian:
Thank you for your understanding and concern about the pressure on foreign trade companies. Since the beginning of this year, multiple difficulties have arisen, including rising raw material prices, poor shipping logistics, volatile exchange rates, and rising labor costs. These led to an increase in operating costs of foreign trade companies and squeezed profit margins. Some foreign trade companies "didn't want to receive orders" or run into a situation where "production increased, but profits dropped." Small- and medium-sized foreign trade companies were hit harder. The MOFCOM has attached great importance to this situation. Analysis shows that the international transmission of prices is the main reason for an increase in raw material prices. The rapid increase in domestic and international demands worsened the situation, which brought great pressure on manufacturing companies and foreign trade companies. Together with local governments and departments, we have been closely following and monitoring the price of bulk commodities, promoting imports through various channels, and building stable foreign trade channels for bulk commodities. The prices of some bulk commodities have already fallen. In terms of maritime logistics, we have been cooperating with relevant departments to closely follow shipping problems, promote an increase in container output, ensure shipping capacity, and enhance price supervision. In response, a series of measures have also been rolled out in various places. At present, significant results have been made to enhance shipping capacity, the return of old containers, and the launch of new containers. Regarding exchange rate fluctuations, we have been working with relevant departments to promote financial institutions to continuously optimize products and services for hedging foreign exchange risks, and actively promoting the guide to exchange rate hedge for foreign trade companies to provide targeted guidance for companies to avoid risks.
The MOFCOM has been closely following the practical difficulties faced by foreign trade companies. Based on in-depth analysis and judgment, we will further improve the trade policy toolbox, optimize the business environment, cut costs for companies, and ensure the stable production and sound development of various market entities, especially micro-, small-, and medium-sized foreign trade companies. Thank you.
Xing Huina:
Today's press conference concludes here. Thanks to all the speakers and friends from the media. Goodbye!
Translated and edited by Zhu Bochen, Wang Wei, Xu Xiaoxuan, Chen Xia, Zhang Liying, Zhang Rui, Cui Can, He Shan, Lin Liyao, Zhang Junmian, Zhang Tingting, Liu Qiang, Qin Qi, Li Huiru, Wang Yiming, Yuan Fang, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
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